Renters Insurance: 5 MistakesTo Avoid

1. Believing Renters Insurance Only Protects the Renter

While it’s true that renter’s insurance does protect the renter and the renter’s belongings, that’s not where the coverage ends. Renters insurance covers the property and the landlord as well. This coverage will differ based on the policy and its limits. Many landlords will require renter’s insurance from their tenants to ensure coverage.

2. Not Anticipating Potential Causes of Liability

Renter’s insurance can cover all kinds of liabilities. Tenants can be held liable for any incident that occurs on their rental property. For example, if the tenant is sued for damages, accused of assault, or if their dog bites someone—these are just a few situations where a tenant may be legally liable in the case of a lawsuit. If you are covered with renter’s insurance, it could help you cover things like this.

3. Underestimating the Cost of Damages

Say you have a kitchen fire on your rental property, as a tenant, you can be held liable. Costs of damages could be significant. Kitchen fires are the most common types of residential fire—whether it’s a burner that was left off, a dish towel caught in the oven, or an electrical malfunction, the kitchen is full of fire hazards. Depending on the severity of the fire, damages could total up to tens of thousands of dollars. Most people don’t have that kind of money in savings. Be prepared with renter’s insurance to cover the high price of any potential disasters.

4. Assuming Building Owner’s Insurance Will Cover You

Princeton Survey Research Associates International conducted a survey that concluded 43% of respondents were not covered by renter’s insurance and believed that they could be covered by their landlord’s insurance. Though it would depend on your landlord’s coverage, it is very unlikely that their plan covers more than damage to the building’s structure. Typically, their insurance will cover things like walls, ceilings, plumbing, etc. It would not usually cover other things, like appliances, décor, and belongings.

Renter’s insurance can cover your belongings. If something were to happen and some important to you was destroyed, damaged, or stolen—it would be covered. Or if disaster strikes and your rental space is not habitable—some renter’s insurance policies will pay for a temporary living situation while repairs are being made.

5. Thinking Renters Have Fewer Liabilities than Homeowners

Though renting comes with fewer responsibilities than owning, there are still liabilities. Renter’s insurance can help you be prepared for these liabilities. For example, if you invite someone over and they are injured in your house or apartment, you could be held liable for their injury and any subsequent bills. Renter’s insurance can help cover these costs. Renter’s insurance covers you when you’re liable for the consequences of whatever may happen on your rental property.